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Pune-based Quickinsure has decided to discontinue its field relationship management model, a move that will reduce staff strength by more than 100. The company said the decision followed an assessment of its operating models in light of the distribution reforms suggested by the Insurance Regulatory and Development Authority of India (Irdai). Also Read: IRDAI pushes LIC, SBI Life to seek further cost efficiency More brokers said they are considering moving to variable cost models. The Irdai's proposed commission caps, if implemented, could lead to brokers reducing their reliance on salaried employees and moving towards more variable-cost models. Experts said the proposed commission caps could significantly reduce upfront remuneration for brokers and distributors, particularly in health and motor insurance. Quickinsure's founder Anand Shrikhande said that with the proposed changes, field models of brokers may not be sustainable. Virtual or distance models can sustain and grow, subject to point-of-sale persons (POSPs) and agents getting the same payouts, he said. Industry executives said lower commissions would make it difficult for brokers to sustain large field-sales teams because salaries remain a fixed cost irrespective of the business generated by individual employees. "The immediate casualty is that I will have to cut down on my fixed cost, high-cost fixed employee model," said another broker. Also Read: Insurance mis-selling is arising because upfront commissions are too high: IRDAI chairman Ajay Seth Irdai has proposed capping individual health first-time commissions at 15% for distribution entities, compared with an industry average of 24%, while new motor own-damage, personal accident and legal liability commissions would be capped at 5%, compared with the current average of 26%. For retail liability and other miscellaneous products, the proposed cap is 15%, with lower limits for corporate and group businesses. The life insurance framework would also move away from high upfront payouts towards remuneration linked more closely to policy persistency. Brokers could increasingly rely on POSPs and other variable-cost distribution channels, where remuneration is linked more directly to business generated. This could result in a leaner workforce and greater focus on sales productivity. Industry participants said the impact is likely to be more pronounced for smaller brokers who depend on cold calling and do not have a large existing customer base. Such brokers could change their business models, tie up with other distributors, or exit the market if the lower commission structure makes their operations unviable. Banks and non-banking finance companies (NBFCs) could also see lower insurance-related income, particularly from products such as credit-linked insurance, where commissions are significantly higher. However, their existing customer relationships could provide some cushion compared with standalone brokers. (What's moving Sensex and Nifty Track latest market news, stock tips, Budget 2025, Share Market on Budget 2025 and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .) Subscribe to ET Prime and read the Economic Times ePaper Online.and Sensex Today. Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price (What's moving Sensex and Nifty Track latest market news, stock tips, Budget 2025, Share Market on Budget 2025 and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .) Subscribe to ET Prime and read the Economic Times ePaper Online.and Sensex Today. Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price
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